Friday, July 19, 2024

Denise Rich May Have Feared Exposure from New US-Swiss Tax Treaty Amendments


Everyone’s wondering why Denise Rich took the drastic step of renouncing her US citizenship? (Everyone of course except the New York Times, which hasn’t reported this story at all.) Was it tax evasion? Was it simply to avoid paying U.S. taxes? Denise—who received $500 million in her divorced from her exiled husband Marc in their 1996 divorce– had been paying taxes right along without any problem. So that’s not it. But Denise did have an issue last March over off shore holdings and taxes. And new amendments to the Swiss-American tax treaty may have persuaded her to escape the US and potential scrutiny.

After all the scrutiny she had in 2000-2001 over Bill Clinton’s shocking presidential pardon of Rich, Denise didn’t need anyone else looking into her finances. But it’s no much about the taxes but about her holdings abroad, and how laws are changing quickly right now. In March the United States and Switzerland amended their tax treaty significantly. The amendment is supposed to make it easier for the IRS and the Treasury Department to see into Swiss bank accounts held by Americans—especially those with tax issues.

According to the Wall Street Journal: “Under the new treaty, U.S. authorities will be able to ask the Swiss to disclose names of U.S. taxpayers at a bank who exhibit certain “behavioral patterns” indicating tax evasion under U.S. law, such as trying to conceal the ownership of the account through a trust. The U.S. also will be able to request information even from small cantonal banks that, unlike UBS and Credit Suisse Group, don’t do business in the U.S.”

If anything besides family convinced Denise to get out of Dodge quickly, so to speak, that would be it. Nothing else makes sense. Rich has been a very vocal public figure, an entertaining socialite who loves big parties in her home and everywhere else. She’ll be missed on the circuit. But the threat of exposure—especially if it revealed any more from her dealings with Marc Rich—may have been the straw that broke the camel’s back.

And the renewed friendship with Rich, who’s said to have been unwell in the last couple of years, could be part of it, too. Although they were once enemies, time, and grandchildren, have given them a truce. They’ve socialized together and have been at family functions. Rich may have warned her about the treaty changes.

According to the New York Times as recently as June 21st, the amendments to the treaty—although Rand Paul attempted to block them in Congress—are going through.

The Times notes: “While the details are still being discussed, the deal calls for Swiss banks to transfer American client data directly to the I.R.S. in a way that allows the banks to honor the spirit of Switzerland’s banking laws. The agency will be able to combine that data with information gleaned through the use of the countries’ existing bilateral tax treaty, as necessary.” Denise Rich might not be the only person we know fleeing the U.S. before the end of the year.

But here’s one thing to remember: once you give up your U.S. passport, there’s no coming home. To visit her home in Aspen, or to see her friends in the U.S.. or throw her annual Gabrielle’s Angel Ball, Denise will now be regarded as a foreigner.

By the way, one other famous name renounced his citizenship in May: Philip Radziwill, stepson of Lee Radziwill, who’s the sister of the late Jackie Kennedy Onassis. Radziwill married a Vogue editor in 2010, so he can probably stay in the U.S. as long as she’s an American.

Roger Friedman
Roger Friedman
Roger Friedman began his Showbiz411 column in April 2009 after 10 years with Fox News, where he created the Fox411 column. His movie reviews are carried by Rotten Tomatoes, and he is a member of both the movie and TV branches of the Critics Choice Awards. His articles have appeared in dozens of publications over the years including New York Magazine, where he wrote the Intelligencer column in the mid 90s and covered the OJ Simpson trial, and Fox News (when it wasn't so crazy) where he covered Michael Jackson. He is also the writer and co-producer of "Only the Strong Survive," a selection of the Cannes, Sundance, and Telluride Film festivals, directed by DA Pennebaker and Chris Hegedus.

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